Eddie Patella: What Real Estate Makes Sense for New Investors?
Eddie Patella has been in the real estate business for many years, providing expert suggestions, advice, and tips for new investors. That's because it's often challenging for first-time investors to get started in a field that can seem overwhelming or impossible to understand. Thankfully, there are a few ways that you can break into this market by choosing investments that make sense for your needs.
Eddie Patella Breaks Down Great First-Time Investments
The real estate market may surge at various times, with specific properties worth more. However, one thing is eternal: rental properties always remain big. This fact is one that Eddie Patella emphasizes over and over again. It is one thing to flip homes and make a big, quick profit. That is a worthwhile investment but is just a one-time profit that must be reinvested later.
Rental properties provide you with a constant source of passive income that can help reinforce later investment opportunities. For example, if you have a mortgage of $1,000 on a home in a prime location, turn it into two rental living areas, and charge $1,000 for each of these areas, you pay your mortgage each month and walk away with a further $1,000 to use for more investments.
You don't even have to invest in residential properties, either. Eddie Patella knows many people who make the mistake of only buying homes or apartment complexes without looking at offices, industrial facilities, and much more. Businesses need a place to operate, after all. But, unfortunately, most new companies don't have the capital to buy a facility, so providing a rental option gives you a good possibility for profit.
But where to invest in such properties? That's always the big challenge for first-time investors. Many know the old cliché "location, location, location" and feel they can't afford to buy into prime-time properties perfectly positioned for success. Typically, you need to buy properties in areas with high demand, including downtown spots in growing metropolis areas and much more.
Expanding to such areas is possible, but you need to progress in a meaningful way. Here's a simple tip that Eddie Patella likes to share with investors who come to him: start with residential and move to commercial. Residential homes and rental property almost always cost less to buy and develop and are always in high demand. After all, people need a place to live, so even if your location isn't prime, you can still make money.
Then, you can use your cycle of passive income to produce a strong investment vehicle for commercial properties. This step includes identifying inexpensive and rundown properties in prime areas, improving them, and putting them on the market for direct sale or renting. Direct sales can help you fund better rental properties and vice versa. This cycle is a powerful way to get ahead in real estate.